By the end of 2022, Reliance will have generated $20 billion in EBITDA

By the end of 2022, Reliance will have generated $20 billion in EBITDA

On Friday, Reliance Industries Ltd (RIL) reported a consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) — a measure of a company’s overall financial performance — of Rs 1,25,687 crore (USD 16 billion) for April 2021 to March 2022 fiscal (FY22), up 29 percent year on year. A 26 percent surge in net profit at Rs 67,845 crore (USD 8.8 billion) was led by its three super-star businesses — oil to chemical (O2C), telecom, and retail.

Morgan Stanley forecasts a USD 20 billion-plus EBITDA run rate for Reliance Industries Ltd by the end of 2022, citing a refining golden age, tightening global gas markets, and increasing telecom subscriber quality. “Reliance is on a path toward a USD 20 billion+ EBITDA run rate inflection, with five-pronged support” of strong refining margin, rising telecom income per user, global gas market tightening, gaining traction on digital commerce, and superior petrochemical spreads, it said in a note.

”Refinery margins could nearly double and be sustained at high levels for the next half-decade, with global fuel markets seeing sustained lower supply due to a lack of investments,” the brokerage said. ”We see telecom ARPUs (Average Revenue Per User) rising, quality of subscribers improving, and churn falling.” ”RIL is producing 18 million standard cubic meters per day of gas from its KG basin, which we expect to rise to 30 mmscmd peak production over the next two years, with increases starting in January 2023.” ”Rising production, along with a tailwind from elevated global gas prices, could increase RIL’s upstream profitability multi-fold over the coming years,” it said.

Gas price for RIL’s KG gas fields rose to USD 9.9 per million British thermal units in April from USD 6.13, and the firm expects further increases in the six-monthly reset in October. ”This should help nearly double EBITDA by end-2022,” Morgan Stanley said. Also, rising traction on digital commerce with 193 million subscribers and a consistent 20 percent revenue contribution should expand margins.

”Digital EBITDA (ex-telecom) for FY22 stood at USD 200 million, but earnings contribution was limited. We think the scale-up of digital revenues is key for RIL to command higher than telecom multiples,” it said. ”The new energy business, along with the five-pronged tailwind, could add USD 50 billion in market cap in 2022, in our view,” the brokerage said.

RIL’s FY22 investments of USD 13 billion increased 25 percent year-on-year and Morgan Stanley believes this should be sustained at such levels for the next few years. About 30 percent of the CAPEX was in telecom, 20 percent in oil to chemicals, 30 percent in retail, and 11 percent in new energy. Including spectrum acquisition, total investments were at USD 19 billion.

Net interest cost was nearly zero for the first time in nearly three years as net debt declined. Including spectrum liabilities, total debt at the end of FY22 was USD 10 billion, with Jio’s standalone net debt at USD 5.4 billion. ”A refining golden age, tightening global gas markets, and improving telecom subscriber quality point to a USD 20 billion+ EBITDA run-rate by end-2022,” it said. ”With progress in new energy investments, a USD 50 billion market cap uplift appears ahead as EBITDA trends pose upside risks.”

Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
My luggage was lost by the plane;  luckily I had Apple AirTags
My luggage was lost by the plane; luckily I had Apple AirTags
Like most frequent travelers, I never check a bag if I don’t have to. I research the aircraft type and try to book a flight on an aircraft with large ...
Maharashtra joins World Economic Forum in battle against plastic pollution
Maharashtra joins World Economic Forum in battle against plastic pollution
By joining the Global Plastic Action Partnership, Maharashtra aims to enhance its commitment to curbing plastic pollution, raise its ambition, and ensure ...
Apple Car is taking some important steps
Apple Car is taking some important steps
It has been anything but smooth sailing for Project Titan, however, and in the intervening years, there have been setbacks. In 2016, former Apple design ...
Kerala government declares gas tax cut at Rs 2.41, diesel at Rs 1.36
Sitharaman reveals ‘implication’ for Modi government after fuel tax cut
Sitharaman, writing on Twitter yesterday, said that this will reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre. This will lead ...
Apple, Google, American Express Company, Mastercard, PayPal, Isis Mobile Wallet, Visa, Merchant Customer Exchange and others expect the mobile payments market to grow dramatically by 2029
Apple, Google, American Express Company, Mastercard, PayPal, Isis Mobile Wallet, Visa, Merchant Customer Exchange and others expect the mobile payments market to grow dramatically by 2029
The report is classified into multiple sections which consider the competitive environment, latest market events, technological developments, countries and ...
WhatsApp will no longer support iOS 10 and iOS 11 smartphones;  here are the iPhones that will be affected
WhatsApp will no longer support iOS 10 and iOS 11 smartphones; here are the iPhones that will be affected
WhatsApp will stop supporting this version of iOS after 24 Oct 2022. Please go to Settings> General, then tap Software Update to ge the latest iOS ...
Amazon writes to future independent directors, denouncing them for facilitating fraudulent ploy
Amazon writes to future independent directors, denouncing them for facilitating fraudulent ploy
The US retailer wrote on May 19 to independent directors of FRL stated that the firm had in meeting with core lender banks on January 1, 2022, “categorically ...
Infrastructure projects worth Rs 500 crore and above would be routed through PM GatiShakti's NPG
Infrastructure projects worth Rs 500 crore and above would be routed through PM GatiShakti’s NPG
Last year, Prime Minister GatiShakti announced a plan to break down departmental silos and bring in more holistic and integrated project planning and ...
Apple AirTag Helps Police Locate Robbery Suspects
Apple AirTag Helps Police Locate Robbery Suspects
KATU2 reported that the police went to the SW Third Avenue and SW Pine Street area and saw him entering and leaving the suite hotel on surveillance video. ...
The reduction of the special tax on gasoline and diesel is fully funded by the federal government
The reduction of the special tax on gasoline and diesel is fully funded by the federal government
The Basic Excise Duty is sharable with states. Special Additional Excise Duty, Road & Infrastructure Cess, and Agriculture & Infrastructure ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo